Mactavish raising the hackles again!
But does it matter?
Many brokers will be feeling vulnerable in the light of recent insurance press reports quoting the criticisms of brokers emanating once again from Mactavish.
In a strive for growth, there might be a temptation for some brokers to start piling them high and selling them cheap. That really wouldn’t do. Now, more than any time in the past, the broker needs a steely resolve to stick to traditional, professional methods – and never lose sight of the client’s best interests.
Of course, that does not mean standing still.
The best aspects of technology must be embraced while retaining the personal touch. It is the absence of human interaction that frustrates clients because it can lead to a client receiving a lower standard of service than is expected. Without proper contact there is no engagement; no matter how many warnings are embedded in the paperwork about ‘checking the policy meets your needs’ the message will not get through.
Our view is that most brokers have little to fear from these frequent broadsides. It might be that some of the larger brokers employing a semi-automated quote machine model may well have a case to answer, but Flaxmans is of the view that the role of the independent and professional broker that thrives on providing a loyal client base with detailed and professional advice is alive and well – and must be preserved at all costs.
We hope the following thoughts will help brokers to rise above the poor standard of professionalism to be found in some quarters. The list is designed to ensure that each client is well protected and that, where a client fails to take your advice, you retain documentary proof of the advice provided and the response of the client. This will be your best protection for the rainy day that criticism comes to your door.
The Demands and Needs Statement
This document, often produced through blind compliance, is your opportunity to make sure the insurance package you have put together really does the job and that nothing has been overlooked. Don’t look at this simply as a compliance ‘tick box’ requirement. It is far from that, if only because it must record what client’s needs were not being met by the policy, and should especially state if the client refused cover recommended by the broker.
Policy Wordings for Business
Depending on the size of your client’s business, it might not always be sufficient to simply accept the package policy offered by whichever insurer comes up with the best quote. Consider whether your client’s interests will be best served through negotiating an improved wording or endorsement or placing cover with another insurer, at the same time recommending that course of action supported by proper reasoning.
Review Available Extensions or a Possible Alternative Insurer
Even if, or especially if, your client simply wants to ‘basic’ cover at minimum cost, you must discuss the available extensions and explore alternatives that might very well represent essential cover, even though your client doesn’t know it. For example, try to anticipate what the next Covid-19 issue might be: perhaps a major power blackout; a country-wide cyber-attack; Scams targeted at a business’s bank account; thieves using electronic means to steal stock; slander through social media; HSE prosecutions. Insurance cover may well be available from the market.
Top 10 Annual Checklist
Compile your own checklist in a way that you can document that advice has been given and to record your client’s response. Here is a ‘starter’ (and non-exhaustive list of ten aspects to carefully consider:
- Cyber insurance including ransomware
- Crime and D&O insurance
- Review of each policy’s ‘Business Description’ and any anticipated changes in your client’s business going forward
- Reassessment of sums insured
- Review possible increases in liability limits of indemnity
- Reassess the indemnity period for BI cover
- Non-damage BI e.g. terrorism disruption
- Explain claims reporting requirements especially for liability matters
- Spell out what ‘Circumstances’ mean in any claims made policies and the importance of prompt notification
- Advise your client to check with all directors to ensure full disclosure of insolvency events including any that have arisen with an unconnected business